The agreement brings together the outstanding combination of Genworth’s strong distribution footprint and leading position in the US Long Term Care (‘LTC’) Insurance market with Partnership’s intellectual property and expertise as the UK’s leading provider of care annuities. The product launch is planned for Q1 2016.
It is estimated that $45 billion is spent annually in the US by individuals self-funding their care costs and fewer than 10% have any form of insurance to meet such costs(1). The product is expected to address a clear unmet need in the US to help individuals pay future care or other costs with a guaranteed income for life.
Deal structure brings together complementary strengths of Partnership and Genworth
• The agreement brings together the complementary strengths of each partner in a structure that has been designed to align the interests of both parties
• Genworth is an expert and market leader in LTC insurance having written approximately 25% of US in-force LTC policies.(2) The product will benefit from Genworth’s brand, market-leading expertise, existing operating platform and distribution capability in the US
• The business will be substantially reinsured into Partnership’s main UK life company, Partnership Life Assurance Company Limited, with pricing based on Partnership’s expert understanding of longevity and Intellectual Property, which has undergone testing to confirm its validity for use in the US
• Assets backing Partnership’s US liabilities will be managed within mandates approved by the Partnership Board. Partnership’s existing investment management strategy will be applied across the US business, with cash flows matched across the portfolio and USD liabilities/cashflows expected to be matched by USD denominated assets/cashflows
Steve Groves, CEO of Partnership, commented;
“I am delighted to announce that the journey we began in 2013 to explore the global application of our leading Intellectual Property has led to this agreement with a market leader for Long Term Care insurance in the US. The potential for this product is very significant; the market is huge and customers seeking to protect themselves against the cost of care over a highly variable future lifetime have limited alternative solutions at the point of need. With data collected over the last 20 years in the UK, we are well placed to help fulfil that need and pursue this opportunity and we look forward to working with Genworth.”
Tom McInerney, President and CEO of Genworth commented;
“Partnership’s expertise in managing longevity risk complements Genworth’s strategic vision for leadership and stewardship within the Long Term Care Insurance industry and we believe it helps solve a clear unmet need in the US. As market leaders in our respective domestic markets, Partnership and Genworth are natural partners with shared and aligned objectives, which will allow us to bring this product to the U.S. market for the benefit of customers and their families.”
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